The bank's first-half cash profit jumped 10 per cent to a $3.5 billion.

Westpac also announced a bonus tax-free dividend of 10 cents a share, similar to the ANZ's move earlier this week to lift its dividend by 11 per cent.

Westpac's chief executive Gail Kelly warned borrowers not to get excited, indicating the bank will not be passing any bonuses to borrowers by lowering rates.

The bank's shares lost 1 per cent throughout the day, not so much a reflection of the profit report, but because the major banks have been sitting around record highs this week and investors wanted to take profits before the US non-farm payrolls report is released tonight.

The Commonwealth Bank lost 2 per cent, while ANZ managed a small 0.3 per cent gain.

Macquarie Group's shares were the standout in the sector, closing up 10 per cent after it revealed a 17 per cent rise in net profit to $851 million.